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Thursday, January 21, 2016

U.S. Navy Petty Officer Sentenced to 27 Months in Prison for Trading Classified Information in International Fraud and Bribery Scandal

A U.S. Navy Petty Officer First Class was sentenced today to
27 months in prison for accepting cash, consumer electronics and travel
expenses from foreign defense contractor Glenn Defense Marine Asia (GDMA) in
exchange for classified U.S. Navy information.

Assistant Attorney General Leslie R. Caldwell of the Justice
Department’s Criminal Division, U.S. Attorney Laura Duffy of the Southern
District of California, Special Agent in Charge Chris D. Hendrickson of the
Defense Criminal Investigative Service’s (DCIS) Western Field Office and
Director Andrew Traver of the Naval Criminal Investigative Service (NCIS) made
the announcement.

In May 2014, Dan Layug, 27, pleaded guilty to one count of
conspiracy to commit bribery and is the first defendant to be sentenced in the
bribery scheme involving Singapore-based GDMA, which provided port services to
U.S. Navy ships in the Asia Pacific region and used bribery to obtain
information to win and maintain contracts.

According to court documents, GDMA owner and CEO Leonard
Francis and other GDMA employees enlisted the clandestine assistance of Layug
and other U.S. Navy personnel to provide classified ship schedules and other
sensitive Navy information.GDMA
allegedly overcharged the Navy under its contracts and submitted bogus invoices
for tens of millions of dollars in port services.

In his plea agreement, Layug admitted that he accepted a
$1,000 per month allowance from GDMA, plus luxury hotel stays for himself and
others in Malaysia, Singapore, Indonesia, Hong Kong and Thailand.Layug also admitted that he sought consumer
electronics from GDMA, including an iPad 3.According to the plea agreement, Layug used his position as a logistics
specialist at a U.S. Navy facility in Yokosuka, Japan, to gain access to
classified U.S. Navy ship schedules, then provided this information to GDMA’s
vice president of global operations.Layug admitted that he also provided pricing information from one of
GDMA’s competitors.

So far, nine individuals have been charged in connection with
this scheme; of those, seven have pleaded guilty.Captain Daniel Dusek and Commander Jose Luis
Sanchez were charged with bribery conspiracies involving GDMA and have pleaded
guilty.Commander Michael Vannak Khem
Misiewicz and former Department of Defense (DoD) civilian employee Paul
Simpkins currently await trial.On Dec.
17, 2013, NCIS Special Agent John Beliveau pleaded guilty to conspiracy and
bribery charges for regularly alerting Francis to the status of the
government’s investigation into GDMA.

The NCIS, the DCIS and the Defense Contract Audit Agency are
conducting the ongoing investigation.Trial Attorneys Brian Young and Lawrence Atkinson of the Criminal
Division’s Fraud Section and Assistant U.S. Attorney Mark W. Pletcher of the
Southern District of California are prosecuting the case.